introduction to the financial world
Download
Skip this Video
Download Presentation
Introduction to the Financial World

Loading in 2 Seconds...

play fullscreen
1 / 18

Introduction to the Financial World - PowerPoint PPT Presentation


  • 121 Views
  • Uploaded on

Introduction to the Financial World. Corporate Finance 2. The financial world. Explain the role of the financial manager Detail the value of financial intermediaries Show an appreciation of the function of the major financial institutions and markets. Primitive and modern economies.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Introduction to the Financial World' - nicola


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2

The financial world

  • Explain the role of the financial manager
  • Detail the value of financial intermediaries
  • Show an appreciation of the function of the major financial institutions and markets
slide3

Primitive and modern economies

Exhibit 1.14 Flows within a simple economy – production level

Exhibit 1.15 Flows within a simple economy – production level plus money

slide4

Flows within a modern economy

Exhibit 1.16 Flows within a modern economy

slide5

The role of the financial manager

Exhibit 1.17 The flow of cash between capital markets and the firm’s operations

slide6

The financial manager plays a pivotal role in the following:

  • Interaction with the financial markets
  • Investment
  • Treasury management
  • Risk management
  • Strategy
slide7

The flow of funds and financial intermediation

Exhibit 1.20 The flow of funds and financial intermediation

slide8

The flow of funds and financial intermediation

  • Primary investors
  • Ultimate borrowers
  • Conflict of preferences
slide10

The introduction of financial intermediaries

  • Brokers
  • Asset transformers
    • Risk transformation
    • Maturity (liquidity) transformation
    • Volume transformation
  • Intermediaries’ economies of scale
    • (a) Efficiencies in gathering information
    • (b) Risk spreading
    • (c) Transaction costs
  • Financial markets
slide11

Savings into investment in an economy with financial intermediaries and financial markets

slide12

Growth in the financial services sector

  • Reasons for growth of financial services in the UK
    • 1 High income elasticity
    • 2 International comparative advantage

Exhibit 1.24 Main features of change in financial services

slide13

The financial system: the banking sector

  • Retail banks
  • Wholesale banks
    • Raising external finance for companies
    • Broking and dealing
    • Fund management (asset management)
    • Assistance in corporate restructuring
    • Assisting risk management using derivatives
  • International banks
    • Foreign banking
    • Eurocurrency banking
  • Building societies
  • Finance houses
slide14

The financial system: long-term savings institutions

  • Pension funds
    • The long time horizon of the pension business means that large sums are built up and available for investment – currently over £800bn
  • Insurance funds
  • General insurance
  • Life assurance
    • Term assurance, whole-of-life policies,
    • Endowment policies, annuities
  • Life assurance companies have over £900bn under management
slide15

The financial system: the risk spreaders

  • Unit trusts
  • Investment trusts
  • Open-ended investment companies (OEICs)
slide16

The financial system: the markets

  • The money markets
  • The bond markets
  • The foreign exchange markets (Forex or FX)
  • The share markets
  • The derivative markets
slide17

Lecture review 1

  • Financial institutions and markets
  • Financial managers
  • Financial institutions
  • Asset transformation
  • Intermediaries and economies of scale
  • Secondary markets
  • Financial services sector
slide18

Lecture review 2

  • The financial system
  • The banking sector
  • Long-term savings institutions
  • The risk spreaders
  • The markets
ad